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by AMAC Certified Social Security Advisor Russell Gloor, Association of Mature American Citizens     

Dear Rusty: My husband died 13 years ago at age 50. I am now 64, never remarried, and work full time making a healthy income. I have never claimed any of his benefits. What are my best options? Signed: Working Widow

Dear Working Widow: You have several options available as both a widow and a worker entitled to your own Social Security benefit.

1. You could collect a reduced survivor benefit (only) from your deceased husband and allow your own SS benefit to grow to a larger amount. At age 70, your own benefit will be about 29% more than it will be at your full retirement age, or FRA, which is 66 years and 4 months (your own benefit stops growing at age 70). If you take your survivor benefit now, since you are claiming it before you reach your FRA it will be reduced by about 11% from the amount your husband was eligible to receive at his death. But at your FRA your survivor benefit would reach the maximum of 100% of what your husband was eligible for at his death.

2. If your survivor benefit from your husband at your FRA will be more than your own benefit will be at age 70, you should strive to maximize your survivor benefit by waiting until your FRA to claim it. You can find out what your survivor benefit will be by contacting Social Security. They can also tell you what your age 70 benefit will be, but you can get that too by creating your “My Social Security” account, which is easy to do at www.ssa.gov/myaccount.

3. If your own benefit at age 70 will be your highest benefit, you should strive to maximize your personal benefit by claiming your survivor benefit (only) first, as described in 1. above, and delaying the claim for your own benefits until age 70.

But here’s a big red flag: since you still work full time at a “healthy income,” be aware that if you claim any SS benefit before you have reached your full retirement age, you’ll be subject to Social Security’s “earnings test” which limits how much you can earn before they take away some of your benefits. The earnings limit for 2021 will be $18,960 (changes annually) and if you are collecting early SS benefits of any type and exceed that limit, they will take back benefits equal to $1 for every $2 you are over the limit (half of what you exceed the limit by). The earnings test is in effect until you reach your full retirement age, after which there is no longer a limit to how much you can earn while collecting benefits.

So, what is your best option, considering the above? Well, if your earnings from work are substantially more than the annual earnings limit, you may find that you will not receive any benefits, even if you were to claim. That’s because they will “take back” benefits by withholding your future Social Security payments until they recover what you owe. For example, if your annual earnings are $60,000, you would exceed the limit by about $41,000, which would mean you would need to repay them $20,500. If your monthly SS benefit was about $1500 (about average), they would withhold benefits for about 14 months to recover what you owe, meaning you wouldn’t be getting any SS benefits while you were earning that much money. Thus, you may find your best option right now is to wait until your FRA to claim any Social Security benefits.

In the interest of full disclosure, there are some nuances related to the earnings limit. The limit is higher, and the penalty less punitive, in the year you reach your FRA (during the months before you reach your FRA). And while you may gradually recover withheld SS retirement benefits starting at your FRA, survivor benefits withheld before your FRA may not be fully recovered, depending upon how long after your FRA you collect them.

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